Category Archives: Insourcing/municipalization

According to a new report by the Transnational Institute, cities across Europe are increasingly deciding to reclaim public goods like water, energy, and health care from corporations and private investors. For example, fourteen cities in the Catalonia region of Spain have brought their water under public control in the past two years alone. … As always, the movement is starting at the bottom. There’s Milford, Connecticut, a small city pushing to purchase its water system after learning that the corporation that owns it plans to raise rates by nearly 30 percent. There’s New York, which just brought back state workers to provide IT help desk services after concerns about rising costs in a contract with IBM. There’s Atlantic City, New Jersey, which earlier this month passed an ordinance to ensure residents get to vote on any action by the state to sell or lease the city’s water system. There’s Baltimore, Maryland, where teachers just recruited hundreds of new public school students after weeks of knocking on doors. And Miami, Florida, where parents and teachers rallied over the weekend to demand more funding for public education and regulation of charter schools.

Less than a year after it started, the state Office for Information Technology Services is backing away from the outsourcing of its help desk, and will be once again have state workers assume many of those responsibilities. Soon after it began last fall, representatives of numerous state agencies complained they couldn’t get through to the newly privatized help desks, which were based in Buffalo but were backed up in Boulder, Colo. There had also been worries about the cost of the outsourcing. … The agency said it will continue to work with its main outsourcing contractor, IBM, but state employees will provide on-site assistance at the various state agencies. The process will begin this month in the Capital Region. …

About 500 University of California workers and students protested the Ronald Reagan UCLA Medical Center’s treatment of contracted valet service workers outside the medical center Friday. Valet service workers, who help park visitor and guest vehicles at the medical center, are contracted through ABM, a facility management company. Beginning in August, however, the hospital will lay off many valet workers because it will no longer be contracting out valet services, said hospital spokesperson Tami Dennis. Instead, it will offer in-sourced full-time, part-time and student positions. … John de los Angeles, communications director of American Federation of State, County and Municipal Employees 3299, the UC’s largest union, said the medical center would only offer 30 positions for the in-sourced program, even though the program currently employs 80 workers. Several students and workers said they think the hospital will carry out the layoffs because the contract workers received a pay raise. …

Neglected water infrastructure is a national plague. By one estimate, U.S. water systems need to invest $1 trillion over the next 20 years. Meanwhile, federal funding for water infrastructure has fallen 74 percent in real terms since 1977, and low-interest government loans have not filled the gap. … The prospect of offloading these headaches to for-profit water companies — and fattening city budgets in the process — is enticing to elected officials who worry that rate hikes could cost them their jobs. Once a system has been sold, private operators, not public officials, take the blame for higher rates. But privatization will not magically relieve Americans of the financial burden of upgrading their water infrastructure. … One of the biggest inducements for water deals is the “fair market value” legislation that has been passed in six states — Indiana, California, Illinois, Missouri, New Jersey and Pennsylvania — and is being considered by others. …

… Even as more cities consider selling their water infrastructure, others are trying to wrest control of their systems back from private operators, usually because of complaints about poor service or rate hikes. Since private owners are rarely willing to surrender these lucrative investments, cities usually end up pursuing eminent domain in court. That means proving that city ownership is in the public’s interest and then paying a price determined by the court. Those prices can be exorbitant. …

In the beginning, the gospel of privatization was as if etched in stone. It was handed down from Sandy Springs, the first new city, to generations of descendants: Dunwoody, Johns Creek, Brookhaven and Tucker. … Sandy Springs is still an adherent of the outsourcing theory. But privatization has gradually given way to more traditional government in many of the nine cities that followed. … While Brookhaven, founded in 2012, started in the Sandy Springs mold, the city brought once-outsourced programs in-house, including community planning, human resources and government technology systems. It still contracts for road paving, park maintenance, permitting and code enforcement. Even those that have backed away from blind faith in privatization still see it as the best way to start a new city. … In Sandy Springs, faith in the model remains unshaken, though it has evolved. … Jason Lary, the mayor of the new city of Stonecrest … [plans] to learn from other municipalities that outsource, and is contracting out city administration, planning and zoning, attorneys and building permitting. The Stonecrest City Council voted Monday to hire CH2M as its primary service provider. … South Fulton is taking the opposite tack. Leaders there want to assume control of the services currently under the county’s umbrella and the employees who provide them. They are negotiating agreements with the county to transfer those departments to South Fulton. …

Since its founding in 2005, Sandy Springs has drawn national notice for outsourcing most city government operations to competitively bidding private contractors. But last month, the city approved three-year, no-bid contract extensions due to fears of government disruption during a planning and development boom. The City Council approved the no-bid extensions only after voicing caution about not shifting to an “in-house,” public-sector government. But new local cities inspired by Sandy Springs, like Brookhaven and Dunwoody, already have brought more jobs and departments in-house. … But the model has changed. In 2011, the city dumped CH2M’s single deal to bid out multiple contracts, saying that saved $7 million. …

While Barrow County leaders mull privatization, one Georgia city provides an example of both sides of the equation. Milton is one of three Fulton County cities that have undergone privatization in the last decade. The majority of operations in Milton, Sandy Springs and Johns Creek were contracted out when they incorporated in 2006, however two of them have since scaled back privatization in an effort to save money. ….. The majority of operations in Milton, Sandy Springs and Johns Creek were contracted out when they incorporated in 2006, however two of them have since scaled back privatization in an effort to save money. In 2008 the economy led to Milton officials renegotiating their contracts in order to save money. The city now has 144 employees and only contracts out a few departments. “What they figured out was that by ending the contract with CH2M Hill, and going with a more traditional model for most departments, Milton saved $1.2 million in 2010 and another $1 million in 2011,” said Milton Communications Manager Jason Wright. …. If Barrow officials decide to privatize on a large scale, then it would become the first county in Georgia to do so….

A temporary shutdown of the LEXserv online and phone bill payment system has been scheduled as Lexington’s Division of Revenue takes over the service from Greater Cincinnati Water Works. Beginning May 15, the city will manage all LEXserv customer service and billing services, eliminating the need for outsourcing. Officials say some of the many benefits include:

City will save taxpayer dollars by moving system in-house;

Customer service will be handled by LFUCG staff in Lexington, creating jobs;

Jacksonville State University police are set to return to in-house dispatch services in July, less than a year after outsourcing those duties in the expectation of improved efficiency. JSU officials now say contracting out the emergency and non-emergency medical calls hasn’t made the dispatch service more efficient. The JSU police will instead use a combination of professional dispatchers and student workers to handle all emergency and non-emergency calls moving forward. JSU police Chief Shawn Giddy sent a letter to Calhoun County 911 Monday stating his department no longer wanted the organization to manage its dispatch services. …

Town Meeting unanimously agreed to $15.5 million as the town’s share of a $31.3 million budget for the Amherst-Pelham Regional Schools and $22.5 million budget for the elementary schools. … The budgets also include money to bring the food service program back in-house, which Hazzard said will mean better tasting, less processed, more organic and locally sourced foods. …

An agreement between Teamsters Local 627 and the city of Pekin to bring yard work back in-house has been reached, which could mean a possible savings of more than $100,000 for the city. Pekin City Manager Tony Carson said the agreement only applies to yard workers, not all of the Teamsters in four bargaining units in the city. The yard workers’ contract will become a part of the Teamsters contract that is yet to be reached with all of the bargaining units. He said he cannot discuss the terms of the agreement until then. Pekin Mayor John McCabe said the return of an in-house yard crew is good news. “We talked about this last year and there’s been a lot of concern about the mowing and other work that’s been done over the last couple of years,” McCabe said. “A lot of people thought we should bring it back in-house because we seem to get better results.” … The city hired Golf Green in May 2013 and discontinued the in-house service.

A former regional manager for private prison company Corrections Corporation of America says top employees at a private prison in Idaho were given yearly bonuses if they cut costs on salary, wages and other operational expenses and met other company goals. CCA, which has since changed its name to CoreCivic, operated the Idaho Correctional Center under a $29 million annual contract with the state of Idaho until chronic understaffing, violence and other problems prompted Idaho Gov. C.L. “Butch” Otter to order the state to take over the facility in 2013. Kevin Myers was CCA’s managing director who oversaw the Idaho prison and several others. He testified Thursday in a federal lawsuit against the company brought by a group of inmates at the Idaho prison. The inmates contend CCA understaffed the prison to boost profits, causing dangerous conditions in which they were attacked.

A private prison company accused by inmates of dangerously understaffing an Idaho prison as part of a scheme to boost profits will have a chance to present its defense to jurors on Monday when a civil trial begins in Boise’s U.S. District Court. Eight inmates at the Idaho Correctional Center sued the Nashville, Tennessee-based private prison company Corrections Corporation of America in 2012, contending that poor management and chronic understaffing led to an attack in which they were jumped, stabbed and beaten by a prison gang. The inmates contend the company, now called CoreCivic, purposely understaffed the prison in a so-called “ghost worker scheme.” CoreCivic didn’t immediately respond to a request for comment but the company has vigorously disputed the claims in court filings. CoreCivic CEO Damon Hininger has been ordered to testify in the trial about comments made during quarterly conference calls with investors.

A federal judge says the Corrections Corporation of America will stand trial in December in a civil rights lawsuit over understaffing and violence at an Idaho prison. U.S. District Judge Edward Lodge made the ruling Thursday. Eight inmates at the Idaho Correctional Center sued the private prison company in 2012, contending that poor management and chronic understaffing led to an attack in which they were stabbed and beaten by a prison gang. CCA spokesman Steven Owen said the Idaho prison was appropriately staffed at the time of the attack and that he’s confident CCA will prevail at the trial. …

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A rat infestation at a Mississippi correctional facility has gotten so bad that some of the prisoners have adopted the disease-carrying vermin as pets, sometimes taking them on walks around the prison on leashes fashioned of paper clips and string...